MGMT 303 (Principle of Management)
SWOT Analysis of Walmart
History of Walmart
Wal-Mart was founded by Sam Walton in 1962, and later incorporated in 1969 and publically traded in 1972. Sam Walton had to success higher sale volumes to keep sale price down with other retail store competitor. Sam Walton mission "to help people save money so they can live better", has proven to be the culture of the company that began from a single store to an empire. Wal-Mart is the largest retailer in the United States and one of the biggest Fortune 500 companies. Wal-Mart has over 10 thousand stores and that including International countries and in 27 countries operating under 55 different banner names.
The strength of Walmart is that they have developed a loyal customer and employee base. This base is extremely loyal. They achieved this loyalty with good customer service for their customers, great pricing for the products they sell and by moving to areas of the country that are often ignored by other retailers. As for their employees they offer flexible hours, competitive wages, health insurance and discounts for their purchases. Walmart is biggest retail store in United States and in the World. The company has been expanding international operations. In 2011, Wal-Mart international operations account for nearly one fourth of the company total revenue, and half of its store count, and nearly 30% of its retail space. The company is a leader in the America retail scenery and is emerging worldwide at a fast pace. Wal-Mart has successful online businesses in the United States, the U.K. and Brazil, where they are already delivering the convenience of multichannel shopping. They also have growing ecommerce businesses in Canada and China. E-commerce gives a great opportunity to bring anytime and anywhere to access millions of customers around the world and introduce several products for company website “Walmart.com” in the U.S. that make shopping easier and more fun. And having insights into millions of shopper experiences and more than 10,000 stores around the world, Wal-Mart is positioned to strongly win in e-commerce. (Ref, Data monitor 2011)
Weakness of Walmart
For example, in order to keep their pricing down they need to buy in large quantities. This need can lead to their inventory being a little unreliable. This means that when customer buy things may not always be able to find certain things that they normally buy and at some time they will have it but they will need to buy a much larger size then they actually need. Another mentioned weakness is Wal-Mart is facing competition in North America with stores such as Kmart and Target. Several smaller retailers, such as one dollar stores, Walgreen, Rite Aids, have been able to find a small niche market and compete successfully against Wal-Mart for home consumer sales. Wal-Mart is the World largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control. Wal-Mart still has low wages and benefits for employees despite hard times in the economy. Wal-Mart currently employs over 2 million people. Although there is power in numbers, are still only as strong as their weakest link. Walmart sell products across many Department like clothing, food, or stationary, it may not have the flexibility of some of its more focused competitors. Another weakness is Wal-Mart has become vulnerable as the price leader and low quality products within its stores. Average US customers income of Wal-Mart is under the national average income, and it is also predict that over 1/5 of them lack a bank account. Walmart their competitor is Target, has increase the quality of products and aims to attract a higher income level customer. This will allow Target to gain sales with less operating expenses. Wal-Mart has survived the economic downturn in modern times, but may face more challenges as the